It’s pay back time

Speaking at the Hindustan Times Leadership Summit, Prime Minister Manmohan Singh exuded confidence about the rate of growth of our economy. He said: “Last year it was 7.4%, this year I am confident the economy will grow at 8.5% and the next year 9-10%.” Such confidence comes notwithstanding the concerns over the recent downward trend in industrial growth. This has touched a 16-month low of 4.4% in September. The Index of Industrial Production (IIP) slipped to 4.4% from 8.2% last September and 6.9% this August. What is more worrying is the fact that growth in the production of capital goods is tending towards becoming negative. This reflects a contraction in our potential for industrial activity. The finance minister has said that this declining trend, “is a matter of concern”.

More important is to see where the benefits of economic growth are going. Currently, the overall rate of inflation is around 9%, higher than the prime minister’s confident assertion of an 8.4% economic growth rate. In real terms, the common people are suffering with the inflation rate in essential commodities being close to 14%. For most Indians, this growth rate, thus, means little in real terms.

The National Sample Survey Organisation (NSSO) has estimated that the unemployment rate rose exponentially in 2009-10 to 9.4% from 2.8% in 2007. Even among the employed, only 16% have a regular salary. 43% belong to the so-called self-employed category and 39% is casual labour.

The declining livelihood status of the vast majority of our people is reflected in their state of health. The National Family Health Survey — 3 (NFHS) has shown a worrisome decline compared to the findings of NFHS-2. The percentage of children aged between 6 to 35 months suffering from anaemia rose from 74.2 to 79.2%. For married women in the age group of 15 to 49, this rose from 51.8 to 56.2%.

This is the health status of the aam aadmi while astronomical sums of money are being looted through the various scams. Irrespective of how the current impasse in Parliament over the demand for a Joint Parliamentary Committee (JPC) to probe into the massive 2G spectrum scam unfolds, it is clear that the country is being pushed deeper into the murky morass of crony capitalism, notwithstanding the PM’s declarations that India can ‘ill-afford’ crony capitalism.

Actually, crony capitalism is a tautology. Capital in its urge to maximise profits invariably seeks to bend, if not violate, all rules and regulations. Nepotism in awarding contracts, sweetheart deals in disposing off public properties (like, for instance, the outrageous sale of the public sector unit Balco and Centaur Hotel, Juhu, Mumbai by the earlier NDA government) and creating illegal and new avenues for money laundering and looting public resources are some of the forms that crony capitalism takes. The capitalist State puts in place certain rules and institutionalises regulators to ensure adherence to these rules in order to provide a level playing field for the capitalists. However, given the fundamental nature of capitalism, where the big fish eat the small ones, these rules and regulations are pushed to the limits of violation. Capitalism inherently breeds cronyism.

In countries like India, late entrants into the global capitalist system, (particularly when it embraces the neo-liberal economic trajectory of globalisation) such cronyism becomes all-pervasive, trapping in its web government institutions, indeed, the entire government itself. This has been the case in the current 2G spectrum scam, with the Supreme Court now dragging in the prime minister and his office.

Probing the 2G spectrum scam is not only in the interest of upholding political morality. This is absolutely essential. The probe, however, must also result in recovering to the national exchequer the loss estimated by the CAG to be of a mammoth R1,76,379 crores. All those who have been allocated the 2G spectrum at throwaway prices must be made to retrospectively pay the difference. The benchmark can be the auction price of the 3G spectrum available in the public domain. The licences of those corporates who refuse to do so must be cancelled and these must be freshly auctioned.

Again, the recovery of these monies, unscrupulously looted, is not only to reassert public morality. This recovery is much needed to improve the livelihood of the vast mass of the Indian people. It has been estimated that to provide all Indian families (APL and BPL) 35 kg of foodgrains at R3 a kilo, it would cost an additional food subsidy of R84,399 crores. The loot in the 2G spectrum scam is nearly double of what is required to provide food security to all Indians. Or, for that matter, education for all is estimated by the National Institute for Educational Planning and Administration (NIEPA) to cost R34,000 crore annually for the next five years or a total of R1.7 lakh crores. This is less than what has been looted in the 2G spectrum scam. In fact, the scam accounts for nearly eight times the R22,300-crore health budget for this year.

A government that continues to wear the pretence of concern for the aam aadmi must be forced to speedily uncover the manner in which such a colossal loot of our country’s resources has taken place. Further, the government must be forced to recover this loss and use these huge sums of money to provide the much-needed food security, education and health for our people.